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it's 10:00 p.m. on a wednesday night here in japan. welcome to this hour's "newsline." economists at the international monetary fund have handed in their report card on the stability of the global financial system. they gave high marks to policymakers for improving the mood of investors, but they say when it comes to shoring up confidence, those policymakers need to pull up their grades. nhk world's ron madison is
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covering the annual meetings at the imf and the world bank here in tokyo. >> reporter: sometimes the challenges, particularly in europe, seem like something right out of a greek myth. you remember the one about people being punished by rolling a bolder up a hill only to roll it down and up again and again? policymakers have put their heads together, but every week they face new problems and still, the economists at the imf said the europeans have to do more. >> the choice today is between making the necessary but tough policy and political decisions or delaying them once more in the false hope that time is on our side. it is not. >> reporter: jose vinals said private-sector money is flowing out of peripheral economies in europe back to the core ones. that's been pushing up borrowing costs for governments and banks in countries such as spain and italy.
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vinals said neighbor nations need to do their part toward stability. policymakers need to build stronger firewalls and establish a banking union and a single supervisor. he said weak banks need to restructure their financing. now, vinals said what's happened in europe should serve as an example for financial leaders in the united states as well as here in japan. he said waiting until the strains become clearer just leads to harsher outcomes. vinals says japan's high level of debt presents a stability risk and said the government leaders need to deal with budget problems. they pointed to commercial bank holdings of government bonds as yet another risk. they project in five years bonds could make up a third of those banks' total assets and they warned those institutions would suffer heavy losses if interest rates rose. now, vinals said japanese leaders need to be more vigilant about their risks. i had a chance to speak with him about some of the problems and
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some of the solutions. mr. vinals, you spoke this morning about japan remaining a concern. you're saying that the sovereign debt could become fully a third of bank assets in five years. holding that many assets obviously puts the banks at risk if bond prices plummet, so how would you say is the best way out of this that's least disruptive to the economy? >> i think that the best way when you have banks with a very significant portion of government bonds is to keep the government's bonds safe. and that is something that you do through medium-term fiscal consolidation. so to me, this is of most priority. >> you're also warning that while we see gains from flows in the safe haven assets like u.s. and japanese bonds, we shouldn't be lulled into a false sense of security. what do you see as the biggest danger looming from this? >> well, i think that the biggest danger is that the government, the political actors decide to delay decisions.
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and i think that confidence is established on a firm ground when it's not. so, for example, in the united states, the message is be careful not to go over the fiscal cliff or to hit the debt ceiling, because that would be very detrimental to the economy and confidence. >> okay. we're still seeing a relatively strong growth in merging markets. how susceptible would you say are they, though, to the global downturn? >> well, they are. if something were to happen in the united states or if there were to be a further escalation of the crisis in the eu area, no one is immune. this is why a key policy message coming from our report is that these countries must keep their guard up and then preserve the policies in place that they have in case they have to use it later on. >> some of the people who make monetary policy got together here to discuss how to manage government debt and all the risks stemming from that. they, too, turned their attention toward japan. japan's vice finance minister for international affairs,
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takahiko knack yao says government officials are fully aware of the situation they find themselves in. the ratio of debt to gross domestic product is the highest among developed countries. the imf urged japan to raise taxes and cut spending. he said government leaders need to take into account how that might affect the cost of social security and whether it might hinder economic growth. italy's central bank governor ignacio visco said european leaders face budget struggles of their own and they, too, worry about slower growth. now, the panelists said government and commercial banks have become closer in recent years. they said they need to prevent the risks faced by countries from spreading to the banking sector. christian from the central bank said a european banking union could break the link between governments and financial institutions and provide some protection. well, indonesia's minister
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of finance navigated through the risks and she helped steer that country through the transition to democracy and now she's helping other countries implement their reforms as managing director of the world bank. some regions that are developing the fastest are actually seeing some of the worst cases of poverty, significant portions of their populations living in poverty. that figure is expected to decline in 2013 from 2010, but still fum fully 24.5%, according to figures, will be living on $2 a day. what more needs to be done to address poverty? >> i think in the next ten years, there is quite a lot of risk. first, it may be very difficult to expect in the same strong growth in the next decade. the quality of growth needs to be improved. how we make each person to pull the poverty out from the level even more, and that will make a design of the growth, which is much different. >> so, the world bank has raised
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concerns about the rising cost of food around the world. how much of an impact is this going to be having on the global economy? >> this is the continuous concern for us, because food prices hit the poor dramatically and immediately. that's why we've already in the past three years have put this food price as the highest priority to the addressed. the policy in combination for many countries in order for them to protect the poor is to build the social safety net. that is the first immediate response that needs to be actually become the highest priority. the more medium anng term is actually getting to how we can invest more on increasing productivity, and that has become a very tough issue because a lot of developing countries have not become overnight. it will change the land for agriculture. so, irrigation productivity and the seeds and all of the productivity is also needed. >> another thing we see now is high unemployment among the younger generation around the world.
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how concerned are you about this trend? >> we are very concerned. in fact, our report this year is actually about jobs. in the next decade we need to create 600 million new jobs. and especially for a country with a younger demographic composition, that problem is becoming even more. youth unemployment is actually the reason for the arab spring revolution still happening. so, it is just another message that it is not only the level of growth which is important but how growth that can create a decent job. because job is very important not only for the development goal but also create quality of life and respectability of the society. so we see that the recommendations is going to be first. on the policy level, the macrostability is needed. that is the necessary condition. the second one on the labor policy, they're required to have a policy that will create more
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of quality of job. the third one is more the affirmative policy that needs to be created in order to address local needs. i think that is going to be an area which is going to be an option for the policymakers. >> okay, all right. >> thank you. >> thank you. >> okay. two days down, two more to go. still lots on the agenda here. finance ministers from the group of seven nations will be getting down to business tomorrow. as you can imagine, they, too, will address the dilemma over the european debt. they'll discuss how those programs affect china and will talk about the risks of what might happen politically in the united states, so be sure to stay with us here. lots more coming up from the tokyo international forum. >> that was ron madison reporting from the imf world bank meeting venue. top imf and world bank representatives spent their day talking about risks of a different kind. they traveled to a disaster mitigation conference in northeastern japan, the region that bore the brunt of last
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year's earthquake and tsunami. world bank officials say it's in everyone's interest to better manage the threats posed by nature, and they say people in japan have a lot of lessons to share. nhk world's takefumi teruyi reports. >> reporter: world bank president kim and imf managing director christine lagarde took a break from the meeting room they often frequent and went on a field trip. they visited the coastal areas around sendai. last year's tsunami washed ashore here and it almost washed away this elementary school. the principal explained to le guard and kim how children, teachers and local residents survived the disaster by following the evacuation plan they had prepared. >> translator: i ordered children in the classrooms and
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schoolyard to evacuate to the rooftop. >> reporter: he said before last year's disaster, administrators and community members had decided to evacuate to the roof in the event of an emergency because the building is the highest in the surrounding area. the conversation about disaster preparedness continued at the sendai dialogue. world bank and japanese officials released a joint statement after the meeting. it urges governments and related organizations to incorporate disaster risk management in all development policies. >> we need to foster a culture of prevention. it's so much more cost-effective to invest in the prevention of damage from disasters than it is to invest in -- is to wait and then to have to pay the cost of reconstruction. >> reporter: kim points to japan
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as a model for mitigating the damage caused by the disaster, and japanese officials say they're ready to share what they know. >> translator: in order to build a disaster-resistant society, we want to provide what japan has developed on disaster prevention, such as know-how, technologies and human resources. through that, we want to contribute to international society. >> reporter: world bank representatives say more money is spent on disaster response and recovery than preparation and prevention. they note that the impact of disasters, especially on the poor, is growing. they argue, investing in risk management could help reverse this trend, saving lives and money. takefumi terui, nhk world, sendai. one of the lasting legacies of japan's earthquake and tsunami has been the crisis at fukushima daiichi. the accident at the nuclear plant prompted japanese leaders to hold off on restarting
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reactors. they've only allowed two to go back online in a year and a half. that's caused imports of liquefied natural gas to rise, driving up the cost of generating power. japanese officials are now working with their counterparts in india to secure a cut in lng import prices. the japan trade minister and the deputy chairman of india signed a joint statement in tokyo. japan is the world's largest lng importer. india's gas imports have been increasing in line with its economic growth. the statement says both countries will work toward a review of lng import prices. nuclear energy now only fuels a small portion of japan's electricity needs. lng is used for thermal power generation. toyota motors recalling more than 7.4 million vehicles worldwide because of faulty power window switches. it's the biggest recall for the
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top japanese carmaker. toyota says about 460,000 cars are subject to recall in japan. they cover six models, such as the vitz, ractis and auris, produced between september 2006 and july 2008. the automaker is calling back these models also in the u.s., china and european countries. toyota says the car's power window switch on the driver's side may malfunction as lubricating grease has not been applied evenly. the company says that if lubricants available at stores are used to fix the problem, it may cause a short circuit and make some parts melt. toyota says it will repair the problem parts or replace them for free, if necessary. two american scientists shared this year's nobel prize in chemistry for their
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groundbreaking discoveries on how cells in the body sense their environment. members of the royal swedish academy of sciences in stockholm made the announcement on wednesday. robert lefkowitz from howard hughes institute and brian kobilka won the prize. they have independently studied how human body cells can sense their environment and discovered that a family of proteins later named g-protein coupled receptors, send signals to the cells. turkey's military commanders are wrapping up their reinforcements along the border with syria. they've sent at least 25 more fighter jets to the area. the build-up of troops and weapons is adding to fears that the fighting in syria could escalate into a regional conflict. turkish forces have fired artillery into syria for six straight days now. they're responding to mortars that have come from the syrian side. the tension at the border began when a mortar fired from inside syria hit a turkish town.
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five civilians died. turkish military commanders say they've deployed 25 f-16 fighter jets to a base near the border. the military's also reinforcing its troops and moving gun batteries to the area. turkish officials say syria's military and rebel forces are engaged in a fierce battle near the border. they say the shells landing in turkey may be off target, but observers say turkey could start air bombings against syria if any more turkish people are killed or injured. they say turkey could also try to secure a buffer zone inside syria. nato secretary-general ander rasmussen says the alliance is ready to defend turkey. the remark is seen as a warning to syrian president bashar al assad to stop mortar shells from striking turkish territory. >> obviously, turkey has a right to defend herself. we have all necessary plans in
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place to protect and defend turkey. >> the statement is nato's strongest show of support for turkey so far. nato views an attack against a member country as a strike on the alliance as a whole. its members can jointly defend another member that's attacked. until now, nato leaders have repeatedly ruled out the possibility of intervening with force in syria. they have said that doing so could destabilize the region. rasmussen reiterated his position that a political solution is the best way to end the fighting in syria. he called on turkey to show restraint. taiwan president ma ying-jeou says chinese boats will continue patrols near disputed islands in the east china sea, but he added that he doesn't want to see a worsening of relations with japan. japan controls the islands and calls them the senkaku islands. china and taiwan also claim them. president ma gave the national address on wednesday, taiwan's
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foundation day. he said taiwan will never allow its territorial integrity to be infringed, nor will it waver in its claim of sovereignsy. >> translator: we will protect our sovereignty and fishing rights. we aim to resolve this issue peacefully and hope to jointly develop resources there. >> ma stressed that taiwan consistently seeks peace and values its ties with friendly countries. >> translator: taiwan will play a peace-making role in the international community and work hard for east asia's peace and stability. >> ma pledged to revive talks with japan on fishing around the waters and aim at jointly sharing the resources. talks have been suspended for more than three years. officials from japan and asean member nations are trying
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to come up with countermeasures against cyber attacks. the move comes after a recent spate of hacking of government and business computer networks. many of the intrusions are believed to have originated in china. the two-day meeting started in tokyo on wednesday between telecommunications officials from japan and the ten asean members. their goal is to boost network monitoring to stop computer viruses and illegal access to websites. the delegates will also begin sharing information about cyber attacks and how to coordinate their responses. japanese officials emphasize that cross-border coordination is indispensable in heading off cyber attacks. security measures in asean countries are lagging behind the rapid growth in the numbers of computer and smartphone users in the region. this has left devices and systems vulnerable to cyber criminals trying to hide their tracks. the look east policy was the
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brainchild of former malaysian prime minister mohammed. he wanted his country to learn from japan's breathtaking economic growth following world war ii, but 30 years after the program began, malaysia's current leader says new lessons need to be learned. nhk world's nabila nishaa reports. >> reporter: mohammed took office in 1981. the charismatic leader governed malaysia for more than 20 years. his era was defined by rapid economic growth. he launched the look east policy in 1982. it saw young malaysians travel to japan to learn new technologies and management skills. about 14,000 people have taken part. a seminar in kuala lumpur on wednesday marked the program's 30th anniversary. its sponsors included a group
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that promotes economic cooperation between malaysia and japan. the 500 attendees included senior government and corporate officials. prime minister najt razia indicated the look east policy would continue. >> we need more investments from abroad. not just investment, any investment, but investment with technology, with more knowledge, more expertise. >> reporter: about 400 malaysians continue to come to japan every year under the look east policy. but with japan's economy barely growing, the number of applicants has declined. other countries such as china hope to create appeal. malays malaysia's economy has expanded about ten-fold over the past 30 years, and the new economy has new priorities. >> i think future look east policy program should be more targeted and more closely linked
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to specific outcomes. >> reporter: japanese-style management was once highly regarded, but the country has lost its status as asia's economic leader. malaysia is looking for other things to learn. japanese environmental and energy-saving technologies lead the world. malaysia plans to refocus its look east policy on those areas over the years to come. nabila nishaa, nhk world, kuala lumpur. the latest in medical science has gone on display in yokohama near tokyo. exhibitors at biojapan 2012 are presenting the latest in drugs, technologies and medical equipment. more than 400 universities, research facilities and businesses are taking part. this booth presents ips technology-related patents belonging to a company run by japanese scientist shinya yamanaka.
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the brother received attention from visitors interested in finding out about the use of ips cells. yamanaka won this year's nobel prize in medicine and physiology for his research on induce d potent stem cells or ips cells. this robot can conduct biotype experiments. scientists are using it to research dangerous viruses. the japanese supercomputer "k" is the world's second fastest computer. it is expected to dramatically speed up the development of new drugs. and here with an update on the typhoon to the east of the philippines and world weather is robert speta. >> well, we are continuing to watch typhoon prapiroon moving off here towards the west-northwest. it has been moving very slowly. actually, right now it has slowed down from 10 kilometers per hour to a very slow lead in the westerly direction. what this is doing is it's expected to continue to intensify as it moves over warm sea surface temperatures, so
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definitely expected to become a very strong typhoon in the next 24 to 48 hours. but really, the track has been remaining erratic. across the southern japanese islands, you'll want to watch this closely definitely going into the weekend and early parts of next week. there in okinawa, you actually have already seen three typhoons move over the main island there. you definitely do not need a fourth one at all, but still want to watch this very closely. at the very least, some of these waves pushing onshore could be upwards about four meters high. definitely going to be creating some very rough and dangerous surf conditions across this area going through the latter part of the week and into the weekend as well. across northern japan, we are watching a low pressure area push in from the west. it will bring severe weather, possibly gusty winds, frequent lightning and even the threat of tornadoes as this does push onshore. so, severe weather threat will continue to linger there and down towards tokyo. i'm not expecting a severe weather threat here, but still, you could be seeing some rain showers throughout your day on thursday. so, you do want to have an
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umbrella handy out across much of this area. across eastern china, dry weather is expected here, but look off towards mongolia. see the area in blue moving over ulan bator? could be seeing sort of heavy to moderate snowfall accumulations across much of that region. and the temperatures, well, on thursday, 8's expected for your high, but going into friday, it will be a dramatic cooldown, only minus 2 for the high temperature here in ulan bator. off towards tokyo, though, much warmer on the other side of the spectrum there. 26 expected for your high going into the latter part of your week. now over towards the americas, though, we do have a low pressure area moving across southern california. it's going to be bringing some precipitation to portions of southern california, even off there towards nevada. flash flooding could be a risk. and into some of the higher elevations, could be seeing seven centimeters of snow. also seeing snowfall across ontario. a low pressure area moved in from the arctic, bringing about 15 centimeters of snow there in southern ontario, plus some cool weather across the great lakes
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regions. look at these temperatures expected for your lows into the midwest. in southern canada here, minus 3 in winnipeg, aberdeen at minus 7 for the low temperature, that is. and in minnesota and minneapolis there, zero into the metropolitan area. you do want to bundle up, because it is going to be a chilly one out across much of the central united states there. now, there's another low pressure area moving on to the british isles. this is going to bring some precipitation. could be heavy at times, even some thunderstorm activity. want to watch out for travel delays going in and out of the uk, as that continues to push off there towards the east. we've been talking about a low pressure area also spinning across northern europe. good news, this is starting to weaken. in germany, you saw 85 millimeters of rainfall in the last 24 hours, so it's starting to lacks off, but it's created partly cloudy skies across portions of norway, and that combined with some space weather has ended up like this. look at these photos out of northern norway here. just this combined with the clouds reflecting off of that,
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absolutely beautiful photos. going thursday night into friday, you could see more of these aurora borealis along the extreme northern portions of europe here due to some space weather. so, definitely watch that, but it's going to be very cool. stockholm only seeing a high of 8 here on your thursday. now here's a look at your extended forecast.
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and that concludes this hour's "newsline." i'm james tengan in tokyo. thanks for watching.
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